Key Points
- Ethereum (ETH) faces a bearish outlook as major holders engage in a selling spree.
- The recent approval of spot Ethereum ETFs in the U.S. has led to a significant drop in Ether’s price.
Ethereum (ETH) is currently experiencing a bearish trend as the month of August draws to a close. This trend is particularly concerning for crypto traders, given that historical data suggests September is typically a bearish month, particularly following a Bitcoin (BTC) halving.
The altcoin market, led by Ethereum, is predicted to continue its downward trend in relation to Bitcoin in the short term, despite the anticipation of the altseason. Bitcoin’s dominance has been steadily increasing, even though it has hit a significant resistance level of around 57 percent. The ETH/BTC pair has been on a declining trend since the last quarter of 2021.
Ethereum Major Holders Turn Fearful
The recent approval of spot Ethereum ETFs in the U.S. has turned into a sell-the-news event, unlike Bitcoin’s. According to the latest market data, Ether’s price has declined by over 28 percent in the past three months, trading at around $2,680 during the mid-London session on Tuesday.
The U.S. spot Ether ETFs have, as of the current data, recorded a cumulative net cash outflow of approximately $477 million, with only one week of net cash inflows. The significant cash outflows from Grayscale’s ETHE have greatly overshadowed the cash inflows from other spot Ether ETF issuers.
On August 26, the U.S. spot Ether ETFs recorded a net cash outflow of approximately $13.2 million and currently hold around $7.4 billion in assets under management. In contrast, Bitcoin’s spot ETFs recorded a net cash inflow of over $202 million and have recorded more positive weeks than outflows.
On-chain data reveals that several large Ethereum holders, including Cumberland and Amber Group, have accelerated their Ether profit-taking in the past 24 hours. For example, a previously profitable major holder deposited over 8.8K ETH, worth $24 million, to Binance earlier today. This holder currently holds 10.6k Ether, valued at over $28 million, and is currently facing an estimated loss of about $15 million.
Midterm Expectations
Following the recent crypto market crash, Ethereum’s price against the U.S. dollar has consistently closed below the 50 weekly Moving Average (MA) in August for the first time since last year. The large-cap altcoin, with a fully diluted valuation of about $324 billion and a daily average traded volume of around $11.4 billion, is on the brink of a further bearish trend in the coming weeks.
From a technical standpoint, Ether’s price formed a double top with a bearish divergence on the weekly Relative Strength Index (RSI) for the past six months. After consistently closing below $2,900 in the recent past, ETH’s price is likely to continue in a bearish outlook in the near term.
